Rusal director Glasenberg quits, bonds slump as USA sanctions bite

Rusal shares plunge sharply on US sanctions

Rusal shares plunge sharply on US sanctions

Both the LME and CME Group's Comex have said they won't allow new deliveries of metal from Russian billionaire Oleg Deripaska's Rusal, the biggest aluminium producer outside of China.

Rusal's shares in Hong Kong have slumped by half since the sanctions were imposed on Friday and gave up another 1.9 percent on Wednesday.

The company made this statement amid a sharp plunge in its shares: they fell by more than 40% on the stock exchange in Hong Kong.

Russia's Moex stock market fell 7.6%, hitting funds exposed to the country.

Russia's En+ Group, which manages the assets of tycoon Oleg Deripaska, said on Monday that new US sanctions were "highly likely" to materially affect its business and prospects in an adverse way.

"We expect the risk of secondary sanctions will impact well beyond just United States imports, and Rusal material will indeed be shunned by many non-US consumers and their financing banks", said Oliver Nugent, a commodities strategist at ING.

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The sanctions - created to make it nearly impossible for Mr Deripaska's empire to do business in greenback - pose a grave threat to an oligarch who has been seen as one of Russian President Vladimir Putin's closest allies.

Rusal is the second-largest aluminum maker in the world, while the USA is the largest importer of aluminium. By making it virtually impossible for Deripaska's businesses to trade in United States dollars, the measures threaten the empire of one of Putin's closest allies. "More and more companies are responding to the sanctions".

The chief executive of Glencore resigned from the board of Rusal yesterday.

Deripaska, whose wealth Forbes magazine estimates at $6.7bn, meets Putin regularly and has said his own interests can not be separated from those of the Russian state.

Russia's prime minister, Dmitry Medvedev, told his government to draw up possible retaliatory steps.

EN+, which only listed in London in November having raised $1 billion from City investors despite fears over the potential of further sanctions being imposed on Russian Federation, said it would focus on maintaining its operations and ensuring it "abides by all applicable laws and regulations".

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